P2P lending Europe – Compare platforms 2019

The P2P lending platforms below are for me trustworthy and good investment opportunities. I invest in several Peer to Peer lending platforms from Europe to diversify and earn passive income.

Learn more about this investment opportunity, returns, risks,  cashback, promotion, pros, and cons.

Mintos
5/5
  • Expected interest rate: 11-13%
  • Min. investment: € 10
  • Buyback guarantee: Yes
  • Started: 2015
  • Loan types: Personal, Car, Mortgage, Business, Invoice financing, Agricultural

Cashback

5/5
  • Expected interest rate: 11-13%
  • Min. investment: € 10
  • Buyback guarantee: Yes – On the whole platform
  • Started: 2017
  • Loan types: Mostly short term and personal loans
Fast Invest
5/5
  • Expected interest rate: 13-16%
  • Min. investment: € 1
  • Buyback guarantee: Yes – On the whole platform
  • Started: 2015
  • Loan types: Consumer based loans
Grupeer
5/5
  • Expected interest rate: 13-15%
  • Min. investment: € 10
  • Buyback guarantee: Yes - The whole platform
  • Started: 2017
  • Loan types: Personal, Car, Mortgage, Business, Development projects
DoFinance
4.5/5
  • Expected interest rate: 12%
  • Min. investment: € 10
  • Buyback guarantee: Yes - On the whole platform​
  • Started: 2017
  • Loan types: Consumer based loans (short term)
viainvest
4/5
  • Expected interest rate: 11-12%
  • Min. investment: € 10
  • Buyback guarantee: Yes - On the whole platform​​
  • Started: 2016
  • Loan types: Consumer based loans

Where should I make my first investment?

Personally, I started at Mintos back in October 2017 and I have an average interest rate is around 13%. I think actually most people start here 🙂

If you use the link to the site on this page they also give back 1% extra in return on your first investment.

I have never regretted because they have an incredibly well-functioning platform. Mintos has the largest market size within P2P lending Europe and they are very safe and reliable to use.

Here is a quick overview of their marketplace:

Peer to peer lending marketplace


To use this platform you must be 18 years old and you can invest from most of the world.

You can transfer money to the platform account from your bank or e-money account.


If you have money in currency other than Euro (EUR) 
I strongly recommend using 
Transferwise to exchange currencies because then you have more loans to invest in. Transferwise has no hidden fees but a low transfer fee (0.35%-2%).

I use it every time and it’s safe. You can actually also open a European bank account for free at Transferwise.

💡 You can follow My investment at Mintos. I update my review every month with news, returns, strategy, risks etc.

What is P2P lending from a European perspective?


What is p2p lending?


Peer to peer lending is also called P2P lending or crowdlending.


It’s a very fast-growing investment opportunity with many good platforms for lending your money to individuals. 


It’s one of my favorite investment opportunities and a big part of 
my investment portfolio.

The first company within P2P lending Europe is called Zopa. They started back in 2005 but they only offer 4-5% in return, so I do not recommend them as there are far better options today.

Ever since has the peer to peer market in Europe developed into a very serious, safe and regulated asset class. 

 

Today there are many platforms within P2P lending Europe but actually also worldwide.  

You can now easily lend out money directly to the borrower and earn interest. You do it without the use of a traditional bank as an intermediary (middleman) but directly on the regulated platforms 🙂

 

Peer to peer loans 

peer to peer lending loans
The loans are typically pre-funded from the loan originator on the platform (within P2P lending Europe) and usually, they also have minimum 5-10% skin in the game (invested into the loan).

 

You lend money to borrowers at a fixed interest rate and receives ongoing repayments including interest.


The specific type of loans the platforms offer is shown in the overview at the top. There is a large variety of loans and it makes it possible for you to diversify your investment portfolio. 

 


Typical peer to peer loans

  • Mortgage
  • Car loans
  • Invoice financing
  • Business loans
  • Consumer loans
  • Personal loans
  • Agricultural loans
  • Development Projects


I prefer to invest in mortgages, car loans, consumer loans, and personal loans. 

 

You can set specific criteria


Customizing is always an option and it’s perfect in relation to your investment profile, diversification, and above all minimization of risks. 

 

You can choose specific criteria like: 

  • Currencies
  • Loan types (Car, Business, Personal, Mortgage, Short-term etc.)
  • Countries
  • Loan originators
  • Loan originators ratings
  • Buyback guarantee
  • Status of the loans
  • Interest rates
  • Loan term

 

Buyback guarantee minimize risks


I always use a buyback guarantee in every single loan to reduce risks.

Even though I may get a higher interest rate, I do not think it’s worth the risk.

Loans that default (the borrower don’t pay)  will be repaid to you typical after 30 – 60 days. You have a high level of security in your investments with this guarantee.

I actually still haven’t experienced that one of my loans were not repaid and I have been investing since October 2017 😎

 

Auto invest makes it easy


Most (if not all) platforms also provide an auto invest option, so you don’t need to use too much time on investing in new loans.

Auto invest strategy



You can choose specific criteria that fit your investment profile and you can even choose portfolio size.

You can also choose an automatic investment setup directly on the platform with pre-made strategies. 


The platforms automatically select loans for you every day. It’s a really great feature and I use it all the time.

Remember, however, to follow up on your auto investment setup sometimes.

P2P lending returns


Annual interest rates are typically around 10-15%
, but you may also find loans with interest rates that are up to 17-20% (However, they are often without a buy-back guarantee).

Most often you can’t withdraw your money from any the loan agreement and I think it’s probably a good idea to have a long-term perspective on this investment.

Compound interest is a really powerful tool to create more passive income. Below I made a great example with returns of € 1000 with 13% annual interest rate in 5 years 😎

Peer to peer lending returns

P2P lending market size and growth 
(especially in Europe)

peer to peer market size



The peer to peer market is developing rapidly and has incredibly strong growth in size. It’s very promising.

It’s among the fastest growing segment in the financial lending market. Just in 2015, the market size in Europe grew by 92% (€ 5.4 billion) according to a survey by the Cambridge Centre for Alternative Finance.

Several different research (like Transparency Market Research) is projecting an increase to one trillion U.S. dollars by 2025 worldwide. Furthermore, Morgan Stanley (US bank) has predicted that P2P lending will reach $490Bn in 2020.

 

P2P lending Europe


The forecasts above provide a good insight into this fantastic investment opportunity currently available within P2P lending Europe.

The European market is still in its infancy as an asset class and I think we will have a lot more P2P marketplaces to use within the next few years.

In China, there are already 4000 P2P lending companies operating on their market (It’s the biggest market but still a crazy big number). If we compare with 2011, the number was only 50 in China.

It’s also fast-growing in India and the Southeast Asia regions.

 

Pros and Cons of P2P lending

Below I have listed some pros and cons to consider.

Pros

  • Stable and predictable returns
  • Lower risks using buyback guarantee
  • Higher yield than most investments (high interests)
  • Easy to handle and understand
  • Great asset class for diversification
  • High control of the investment 
  • Auto invest with little time involved
  • Low barriers to entry (1 EUR minimum, no fees)
  • Current trends and future estimates are very promising 
  • Lending directly to peers (borrower) is like helping  people out

Cons

  • Sometimes less liquidity than stocks, index funds or bonds because of long time horizons
  • Not secured by any government guarantee
  • The asset class haven’t been around for a long time (since 2005 in Europe)


You can follow my personal experiences with peer to peer lending here on my blog. I update every single month with the progress, cashback, special promotions, returns, news, my investment strategies, etc.


Right now I invest in Mintos, PeerBerry, Grupeer and Fast Invest.

 

➀ Mintos review

➁ PeerBerry review

➂ Grupeer review

➃ Fast Invest review

➄ DoFinance review

Viainvest review

 

Frequently asked questions

Is there any promotion code or cash back program?


Yes. You can get 1% extra in return on your first investment at
MintosYou can also get 10 EUR at Fast Invest.

The money will be paid within a very short time on your platform account.

 

Can anyone create an account on the various peer to peer lending sites?


Yes if you are 18 years or older. Some platforms also require a picture of your personal identification document (ID).  This can be a government-issued ID or scan of your passport.

 

Can I trust the platforms? Are they safe to use?


Yes (In my opinion). They use risk mitigation policies and loan originators are regulated.

However, you shouldn’t invest only in p2p lending. You can read my blog post about how I manage my investment portfolio to minimize risks. You can also read more about how, for example. Mintos protects its investors

 

How do I pay tax on my returns?


Depending on where you live, local authorities have their own tax system. You should either get local advice or contact the authorities. On the various peer to peer lending platforms, you can also get tax reports. You can use it to report your returns.

 

Are there any platforms that you don’t recommend?


I personally never invest without a buyback guarantee or loans backed with a mortgage. Some platforms, unfortunately, don’t have this option at all. I think the risk is too high without. Platforms without this security are, for example. Bondora. 

In addition, I also look at their history and development.


That's it. I hope you liked this topic about P2P lending Europe.
If you have any questions, feel free to comment below 🙂

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Read more about me and this blog

Peter Michael

I'm an investor and the blogger behind MyInvestment.Blog. I write about investment, financial independence, and personal development. I try to combine the topics and show my journey towards financial freedom.

6 Responses

  1. John says:

    Hey, You have shared great piece of information over here.
    You make some good points about peer to peer lending that I never thought about.
    Thanks for sharing!

    • Peter Michael says:

      Many thanks, John!

      I update the page continuously (like the rest of the blog), so the information is not outdated.

      I really look forward to uncovering P2P lending in Europe because a lot happens in these years 🙂

  2. Krystle says:

    Hi friends, pleasant piece of writing and pleasant arguments commented here, I am
    really enjoying by these.

  3. MonkWealth says:

    Great post, Peter!

    I’ll use some of your referral links.

    • Peter Michael says:

      Thanks, Monk!

      Several of the places that I recommend have promotion codes 🙂
      Have a good time in the Netherlands!

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